Last night, the Federal Reserve announced a 25 basis point cut, which was not unexpected. What’s truly noteworthy is another move behind this meeting—a subtle form of "indirect easing" that is being set in motion and not openly acknowledged.

First, let’s address the concern: how many more rate cuts can we expect next year?
The answer may be disappointing. According to the latest dot plot, most Fed officials expect only a 25 basis point rate cut in 2026. In other words, over the next year or so, monetary policy will remain largely "frozen." The market’s previous expectation of continuous easing? For now, forget it.

Meanwhile, another development is underway:
Starting December 12, the Federal Reserve will purchase $40 billion worth of short-term government bonds each month. Officially called "Reserve Management Purchases" (RMP), the explanation is that this is a "technical adjustment, not QE."

But what about the actual operations?
- The balance sheet reduction has already stopped since early December
- Principal on maturing MBS is no longer recovered; instead, funds are redirected to short-term debt
- The New York Fed will continue buying in the secondary market, with transparent operational plans
- The Fed’s balance sheet is about to expand again

In simple terms: printing money to buy assets and injecting liquidity into the market. How does this differ fundamentally from quantitative easing? It’s just a different way of saying it.

Why do this? Because bank reserves are nearly exhausted, overnight lending rates are becoming unstable, and the financial system needs "blood transfusions." The Fed is well aware that, in the current economic environment—

(Note: The original text cuts off here, with the ending left hanging.)